As I noted in yesterday's post dear readers, the market was, and still is, at overbought levels according to the trusty McClellan Oscillator (which has nonetheless climbed down after today's action) and the ways for markets to work off overbought conditions are either a sharp pullback or a period of slow consolidation. And the latter is exactly what the markets did today. In my opinion, today's action fitted perfectly well with the best case scenario for the bulls. Since the market's hardly went anywhere today, I will not be posting the usual index charts today.
Personally speaking, I sold out of MTG at 9.11 early in the day for little over 1% gain and seeing where it closed, I am glad that I did. NR performed very well the entire day. But respecting the overall market conditions, I took profits in it, selling 1/3rd of my position at 8.30 and another 1/3rd later at 8.25. It reports later this week and I might just hold on to the remaining third position for the results. But its too early to think about that as depending on the market action, I might just sell it tomorrow.
As far as the strategy for tomorrow is concerned, another 2-3 days of such consolidation will be perfect for the bulls. I feel the best strategy here is to just sit back and watch the markets. On slow moving boring days like today, traders often find themselves trying hard to manufacture things. I certainly have been caught in that trap often. Its important to let the trade come to you, rather than trying to force the issue. My largest position is cash here and I am content with that. Remember, the markets are still at overbought levels. If you feel like starting new long positions here, I would recommend either keeping the position sizes small or making day trades. So, that's it from me for now.
Take care and good luck!